WELSH WADE IN TO FUNDING DEBATE

The Welsh Assembly has launched a consultation into the way local government is funded in Wales.

Although the Assembly does not have the legislative power to change the system of local taxation in Wales, ministers are keen to provide the ODPM's review of the balance of funding in England with a Welsh perspective.

Sue Essex, minister for finance, local government and public services, said the consultation provided the basis for a 'full and informed debate' on the balance of funding.

'I recognise there are strengths and weaknesses in council tax as the current form of local taxation,' she said.

'I want to consider suggestions for alternative forms of local taxation which may complement or even replace the council tax.'

As well as giving the balance of funding review group a Welsh viewpoint, the consultation would open a debate on changes that could be made in Wales irrespective of reform elsewhere in the UK, said Ms Essex.

Sir Harry Jones (Lab), leader of the Welsh Local Government Association, said the consultation could end the blame game between central and local government over high increases in council tax.

'Councillors are damned if we do and damned if we don't. Our hands are tied because of the limits on raising revenue locally for local needs and priorities or to supplement shortfalls in national funding,' he said.

Russell Goodway (Lab), leader of Cardiff CC and finance spokesperson for the WLGA, said that since the Assembly itself could not change local taxation it was 'nonsensical' that Wales had been excluded from the ODPM's balance of funding review.

'The question that must now be asked is how the ODPM's review team is likely to react if Wales' proposals are markedly

different from the emerging consensus in England,' he said.

In Wales, just 19% of councils' revenue is raised locally, compared to 25% in England. Last year, council tax increases in Wales averaged 10%, while the average rise in England was 12.9%.

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